Micro, Small and Medium Enterprises Development Act (MSMED Act) 2006 

With the enactment of the MSMED Act, 2006 which came into force on the 2 nd October 2006, the system of SSI registration has been done away with and the new system of filing of Entrepreneurs Memorandum (EM) has been introduced. Also the earlier concept of “Industries” has been changed to “Enterprises”. Classification of enterprises under MSMED Act 2006 is given.

                 Classification of Enterprises under MSMED Act 2006

 

 

 

 

 

Enterprises engaged in the manufacture or production of goods

Enterprise

Investment in plant and machinery

 

 

 

 

 

Enterprises engaged in providing or rendering of services

Enterprise

Investment in plant and machinery

Micro enterprise

Not exceed Rs.25.00 lakh

Micro enterprise

Not exceed Rs.10.00 lakh

Small enterprise

More than Rs.25.00 lakh

Not exceed Rs.5.00 crore

Small enterprise

More than Rs. 10.00 lakh

Not exceed Rs.2.00 crore

Medium enterprise

More than  Rs.5.00 crores

Not exceed Rs.10.00 crore

Medium enterprise

More than Rs.2.00 crore

Not exceed Rs. 5.00 crore.

In calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items are excluded. In the case of service enterprises, ‘equipment ’is defined as all instruments, office machines and such other electro – mechanical or electronic appliances that are directly related to the services rendered but excluding furniture, fittings and other items not so related.

 

Filling of Entrepreneurs Memorandum 

Filing of memorandum is optional for all Micro and Small Enterprises.

  • Filing of memorandum is optional for service sector medium enterprises
  • Filing of memorandum is mandatory for manufacturing sector Medium Enterprises
  • The form of memorandum is in two parts. Any person who intends to establish a micro or small enterprises or medium service enterprise may file or those who want to establish medium enterprises engaged in production or manufacture of products shall file Part I of the EM to District Industries Centre
  • Once the above enterprises start production or start providing or rendering services, they shall file part II of the EM to DIC

In case of non – filing of Part II of the EM within two years of the filing of Part I, the memorandum (Part I) filed by the entrepreneur will become invalid.

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